Subsection 184(2) - Tax on excessive elections
Administrative Policy
22 January 2019 External T.I. 2019-0791631E5 - Calculation of Capital Dividend Account
CRA confirms that where a corporation has paid a capital dividend in Year 1 based on a capital gain realized by it in that year, a capital loss...
IT-66R6 "Capital Dividends"
Subsection 184(3) - Election to treat excess as separate dividend
See Also
4432002 Canada Inc. v. The Queen, 2022 TCC 101
The taxpayer had been reassessed on the basis that deferred sales proceeds received by it were income under s. 12(1)(g) rather than eligible...
Magren Holdings Ltd. v. The Queen, 2021 TCC 42, aff'd on other grounds 2024 FCA 202
The appellants engaged in transactions which were intended to result in the realization by them of substantial capital gains (resulting in...
Morissette v. The Queen, 2019 TCC 103
In 2011, a corporation (“9158”) paid a dividend (allegedly, a capital dividend) of $485,447 to its wholly-owning parent (“9102”), who paid...
Administrative Policy
7 October 2021 APFF Roundtable Q. 10, 2021-0901001C6 - Application of subsection 184(3) and 185.1(3)
Vendors may proceed with a preliminary reorganization before a share sale and agree in advance that an s. 184(3) election will be made in the...
6 October 2017 APFF Roundtable Q. 10, 2017-0709081C6 F - Election to treat excess as separate dividend
The s. 184(3)(b) excess dividend election is made respecting the amount of the original dividend that was payable. S. 184(3)(d) deems the...
6 October 2017 APFF Roundtable Q. 5, 2017-0709031C6 F - T2054 - Short Cut Method
In 2011-0412071C6 F, CRA indicated that if the corporation informs the local Tax Services Office that it wishes s. 184(3) to apply, the TSO will...
S3-F2-C1 - Capital Dividends
Examples of excess distributions
1.85 An overstatement of the CDA can arise in a number of ways. Examples include:
- a corporation might pay a...
4 December 2013 External T.I. 2013-0504951E5 - Objection Part III Tax -184(3) Election
Aco, which had a capital dividend account of $100, paid a dividend to its sole shareholder, Bco and elected for the dividend to be a capital...
7 October 2011 APFF Roundtable Q. 4, 2011-0412071C6 F - Modifying a Capital Dividend Election
Where the directors declare a capital dividend and before the payment date for the dividend the corporation (which has individual shareholders)...
8 October 2010 Roundtable, 2010-0373261C6 F - Choix prévu au paragraphe 184(3)
After a corporation is assessed under s. 184(2) in respect of an excess dividend following an audit of the calculation of its capital dividend...
5 December 2007 Internal T.I. 2007-0221211I7 F - Capital Dividends
A private corporation (Aco), which had paid a capital dividend out of what it believed to be a capital dividend account balance generated by a...
5 December 2007 Internal T.I. 2007-0221211I7 F - Capital Dividends
A private corporation (Aco), which had paid a capital dividend out of what it believed to be a capital dividend account balance generated by a...
14 June 2007 Internal T.I. 2007-0229311I7 F - Capital Dividend Account
Subco declared a dividend payable to its parent (Parentco) which, in turn, declared a corresponding dividend to its individual shareholder (Mr....
2 May 2005 Internal T.I. 2005-0119971I7 F - CDA - Excessive Election & Late Filed Election
Xco filed a s. 83(2) election in 2001, whose amount was excessive due to an amount in fact not having been an addition to its capital dividend...
May 1999 CALU Conference No. 9908430, Q. 2
As s. 184(3) only deals with the excess of the full amount of a dividend over the capital dividend account, there is no scope for the Department...
IT-66R6 "Capital Dividends"
Paragraph 184(3)(d)
Administrative Policy
29 June 2007 Internal T.I. 2007-0229431I7 F - Excessive Capital Dividend
A corporation owed a dividend, interest and salary and wages to its shareholders, and effected part payment by way of set off. The total amount of...
Subsection 184(3.1)
Cases
Special Risks Holdings Inc. v. The Queen, 88 DTC 6444, [1988] 2 CTC 244 (FCTD), aff'd 89 DTC 5039 (FCA)
After being assessed for Part III tax, the taxpayer made an election under s. 184(3.1) on the understanding, shared by MNR, that the provision...
Subsection 184(4)
Administrative Policy
21 April 2008 External T.I. 2007-0220471E5 F - Excessive Capital Dividend and 220(3.2)
After a corporation paid a capital dividend to its two shareholders and before CRA assessed to reduce the corporation’s capital dividend...